1998 Brazilian Exports Reported.

Decrease in shipments of roll goods partially due to a low exchange rate.

For the first time in this decade, shipments of nonwovens from Brazil have decreased in 1998. Export statistics obtained from the Brazilian Chamber of Commerce indicated that there was a strong reduction in terms of both value and weight from 1997 to 1998. The value of Brazilian exports in 1998 decreased 38% compared to 1997, reaching only $27 million (see Figure 1). Export data is based on shipment documents collected by the Brazilian Custom Service and on the Brazilian Tariff Schedule (TAB) classification codes, which must be posted on outgoing materials. Under the TAB, nonwoven roll goods are classified under two codes, the first of which is 5603.00, which covers nonwovens that are impregnated, laminated, coated or sealable. This classification includes different weight divisions (less than 25 gpsm, 26-70 gpsm, 71-150 gpsm and more than 151 gpsm). TAB code 5602 covers needlepunched and stitchbonded roll goods.

Of the Brazilian roll goods exported in 1998, 8.7 million kilograms were exported to various countries around the world, with the majority going to the Mercosul market, which includes Brazil, Argentina, Paraguay and Uruguay. This figure represents 25% less than the 11.7 million kilograms exported in 1997, which were valued at $38.2 million FAS (the FAS value is defined as the transaction cost and does not include freight, insurance and duties). Exports in 1998 were 38% less than the FAS value for nonwovens exported in 1997.

The 1998 figure of $14.2 million is the result of exports to the Mercosul market and makes up 51.6% of the total amount exported to this market. In 1997, $21.6 million (or around 56.5%) was exported to the same countries. The export reduction to the Mercosul market was around 34% in value (see Figure 2).

Brazil exported $3.4 million to NAFTA countries--the U.S., Canada and Mexico--which represents 12.3% of the total nonwoven roll goods exports from Brazil in 1998. This number is an increase compared to 1997's figures when the FAS value of Brazilian exports equalled $2.9 million.

The South American market, comprised of Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela, contributed to the 1997 figure with $12.2 million, which represents 31.9% of total exports. Brazilian exports to these countries in 1998 was $9 million, a 32.8% raise in total exports but a decrease of 26% compared to 1997.

The remainder of exports went to countries in Central America, Africa, Europe and the Far East. These exports contributed to 1998's total with $0.9 million or 0.3%, a decrease compared to 1997's $1.5 million or 3.9%.

The principal nonwoven categories exported by Brazil continue to be polypropylene spunbonded materials for the hygiene, mattress and furniture industries as well as thermal bonded nonwovens for hygiene, polyester spunbonded nonwovens for geo-textiles and needlepunched nonwovens for automotive, bedding and filtration applications.

Among the factors that contributed to the reduction in exports last year was a low exchange rate that did not provide healthy business conditions to Brazilian companies. Other factors included a reduction in product weights, mainly in the hygiene market, along with a decrease in the worldwide price of roll goods for the hygiene market due to high competition. Another factor is the devaluation of the Real (R$) by the Brazilian government earlier this year, which is currently around $1=R$1.83 compared to $1=R$1.25 at the end of 1998. With these conditions, Brazilian companies hope to increase their exports in 1999.

Freddy Gustavo Rewald is president of Nao Tecidos Consultoria e Assesoria, a Sao Paulo, Brazil-based consulting firm. He also organizes a nonwovens basics course and writes a quarterly column for NONWOVENS INDUSTRY. Mr. Rewald can be reached at Rua Pedro Pomponazzi, 110 apto 242, CEP 04115-000, Jardim Via Mariana, Sao Paulo, Brazil; Tel/Fax: [phone]